Office Of The Auditor General For The Federation - Request For Expression Of Interest For Engagement Of External Auditor To Support The Basic Health Care Provision Fund (BHCPF)

THE OFFICE OF THE AUDITOR GENERAL FOR THE FEDERATION IN CONJUNCTION WITH THE FEDERAL MINISTRY OF HEALTH REQUEST FOR EXPRESSION OF INTEREST BASIC HEALTHCARE PROVISION FUND PROJECT (HUWE PROJECT) (PROJECT ID: P163969) ASSIGNMENT TITLE: ENGAGEMENT OF EXTERNAL AUDITOR TO SUPPORT THE BASIC HEALTH CARE PROVISION FUND (BHCPF) REFERENCE NUMBER: OAUGF/BHCPF PROGRAM/REOI/001/2019

INTRODUCTION: The NHAct was approved by the National Assembly in 2014, signed into law by the President and gazetted in 2014.The Act provides for the establishment of the Basic Healthcare Provision Fund (BHCPF) as the vehicle for providing a Basic Minimum Package of Health Services (BMPHS) for all Nigerians. The Fund as stipulated in the Act shall be financed by contributions from the following sources – (1) the Federal Government annual grant of not later than 1% Consolidated Revenue Fund, (2) Grants received from donor agencies, (3) and funds from other sources. The Act stipulates that 50% of the Fund Shall be implemented through the NHIS gateway whilst 45% shall be implemented through the NPHCDA gateway and the remaining 576 for the provision of emergency service, through the emergency medical treatment (EMT) and NCDC gateways.

As part of implementation of the BHCPF the Federal Government of Nigeria (FGN) has received a grant from the World Bank/Global Financing Facility (GFF) and partners including Bill and Melinda Gates foundation. To assure transparency and accountability in the use of funds the framework for the implementation of the BHCPF assigned the responsibility of procuring and managing the roles of the External Auditor to the secretariat of the BHCPF and the Auditor General for the Federation. The External Auditors to be recruited will ensure judicious use of funds in keeping with global best practices.

The External Auditor will be recruited to verify funds received and utilized at each level of the BHCPF administration, correlate financial statements with disbursements made.

The assignment will assess the compliance with funds management requirements as prescribed in the operations manual and other terms as specified by the Minister of Health and/or the National Steering Committee (NSC).

OBJECTIVES The overall objective of the external audit is to express a professional audit opinion in accordance with ISA 800 on whether: – • The consolidated financial statements of the BHCPF in all material respects, are in conformity with the applicable Financial Rules and Regulations of BHCPF and Agreement Terms and Conditions of the financing agreement. • The program books of accounts provide the basis for preparation of those financials statements and are established to reflect the financial transactions in respect of the program and that it maintains adequate internal controls and supporting documentation for transactions. The specific objectives of the external auditor will require that the EA verifies funds received and utilized at each level of the BHCPF administration, correlate financial statements with disbursements made. The assignment Will assess the compliance with funds management requirements as prescribed in the operations manual and other terms as specified by the Minister of Health and/or the NSC.

SCOPE OF SERVICES: The external auditor will independently assess the extent to which the BHCPF is being implemented according to the BHCPF Operational Manual (OM). This will involve the following: (1) Conduct financial audits of BHCPF including sources and use of funds from the BHCPF designated account to the accounts of the management secretariat of the NSC, NHIS, NPHCDA, EMT subaccounts, and the accounts of the SSHISs and SPHCDAs and using such tests and procedures as the consultant will consider necessary under the circumstances; (i) That payments were transferred from the NHIS and NPHCDA sub accounts (or/and state equivalent) to the designated account of the health facilities (and that the right amounts were transferred and at the stipulated time); (ii) The payments transferred to the health facilities under the NHIS and NPHCDA gateways have been used in accordance with the conditions in the Operational Manual (OM). Health facilities to be audited will be selected using an approved sampling method; (iii) Goods, works and services financed at all levels have been procured in accordance with the procurement policies and procedures as stated in the OM and PPSD; (iv) All necessary supporting records and accounts have been maintained in respect of all project activities, including expenditures reported using Statement of Expenditure (SOE). The auditor is expected to verify that respective reports issued during the period were in agreement with the underlying books of accounts. The auditor would check the activities of the designated account: (i) deposits received from SPHCDA; (ii) interests that may have been earned on the accounts; (iii) Withdrawals related to project expenditures. The auditor would examine the eligibility of the financial transactions during the period under review and funds balances at the end of such period and the operation and use of the designated account in accordance with the OM; (v) Sampled health facilities designated accounts have been maintained in accordance with the provisions of the relevant financing agreements and funds disbursed out of the account were used only for the purpose intended according to the OM; (vi) Financial performance of the management secretariat and the national and state level agencies is satisfactory; (vii) Assets procured from project funds exist and there is verifiable ownership by the implementing agencies. (viii) Carry out such tasks as the NSC of the BHCPF reasonably requests to facilitate the successful implementation in the participating states. (2) The audit will be carried out in accordance with the standards specified in iii above and will include such tests and verification procedures as the auditors consider necessary under the circumstances. In conducting the audit, special attention should be paid to the following: (i) Carry out tests of transactions as are necessary, in order to obtain an understanding of the accounting system, to assess its adequacy as a basis for the preparation of the financial statements and to establish whether adequate records have been maintained as required by the BHCPF Financial Rules and Regulations: Financial Manual and applicable rules of the donors; (ii) Conduct an in-depth and exhaustive review of the internal control systems to have sufficient knowledge of the procedures underpinning the systems, as contained in the BHCPF OM; Financial Manual and the applicable rules of the concerned donors; (iii) Confirm that although responsibility for preventing irregularity and fraud remains with the Secretariat, the audit has been planned so as to have a reasonable expectation of detecting material misstatements in the financial statements; (iv) State the extent to which it has relied on the work of the Internal Audit; (v) Confirm that funds have been used in accordance with the applicable rules of the concerned donors, NSC -BHCPF decisions with due attention to economy and efficiency, and that they have only been used for the purposes for which they were intended for and in accordance with the conditions under which the funding was provided: (vi) Confirm that Goods and services Financed have been procured in accordance with sound procurement procedures spelled out in the BHCPF PPSD; Financial Rules and Regulations and applicable rules of the donors. (vii) Confirm that all necessary supporting documents, records and accounts have been kept in respect of all activities. Clear linkages should exist between the books of accounts and the financial statements presented; (viii) Confirm that the Financial Statements have been prepared in accordance with acceptable accounting practice and give a true and fair view of the financial position of the Secretariat as at the end of the financial year; and (ix) Confirm that where designated accounts have been used, they have been maintained in accordance with the provisions of the relevant Memorandum of Understanding and Agreements. The above-defined scope does not in anyway restrict the audit procedures or the techniques that the auditor may wish to use in forming an opinion on the Financial Statements being audited.

LOCATION AND DURATION OF SERVICES: The auditor will conduct the audit at the FMOH and its implementing entities – NHIS, NPHCDA and EMT and state level implementing entities in all 36 + 1 states. However, in the kick off phase, the audit will take place in a sub-set of States as determined by the NSC.

All implementing entities in the BHCPF are required to provide official written response to all external audit queries or findings affecting them within 5 working days of receipt of such queries. The response shall be forwarded to the NSC and copied to the office of the Federal Minister of Health.

It is expected that the contract will have a duration of two years. However, this is subject to a mid-term review and satisfactory delivery of services.

The Office of the Auditor General of the Federation and the Federal Ministry of Health now invites eligible consulting firms (“Consultants”) to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The shortlisting criteria are; (i) Must be a Chartered Accounting/consulting firm with Services in Accounting, budgeting and Financial Management; (ii) Possess key staff the size and staff with cognate experience. (iii) Key Staff possesses minimum required basic academic and professional qualifications and specialized experience on the assignment. (iv) Capacity Building Experience; (v) The firm has worked in Nigeria and had undertaken such assignment before in the public sector – experience in the health sector will be an advantage. (vi) The firm had undertaken at least an assignment in budgeting reforms (MTEF) and public-sector accounting (IPSAS implementation), have a good understanding of ongoing GoN PFM reforms including TSA administration amongst others. (vii) The accounting firm must be properly registered with the office of the Auditor General for the Federation The attention of interested Consultants is drawn to paragraph 1.9 of the World Bank’s Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits &Grants by World Bank Borrowers, May 2011, revised in July 2014 (“Consultant Guidelines”) setting forth the World Bank’s policy on conflict of interest. Consultants may associate with other firms in the form of a joint venture or a sub-consultancy to enhance their qualifications.

CONFLICT OF INTEREST: As the role of the external auditor is one that bothers on accountability and quality assurance it will be clearly stated to potential bidders that they cannot be part of other implementation arrangements of the BHCPF, for instance, technical support to states or any of the implementation agencies. Furthermore, the bidders cannot be part of the Impact Evaluation/PRPP to be undertaken for the BHCPF.

Consultant(s) will be selected in accordance with the Consultant Qualification Selection method set out in the Consultant Guidelines. Further information can be obtained at the address below during office hours from 10.00am to 16.00pm, Mondays to Fridays, excluding public holidays.

SUBMISSION OF EXPRESSION OF INTEREST (EOI) DOCUMENTS: The Office of the Auditor General now invites eligible consulting firms (“Consultants”) to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have the required qualifications and relevant experience to perform the Services. The shortlisting criteria are; (i) Evidence of legal status of the firm (Certificate of Incorporation/ registration); (ii) Profile of firm including ownership structure with full contact details; (iii) Evidence of standard financial management practice including company Income Tax Clearance Certificate (TCC) for the past (3) years (2016, 2017 and 2018), valid till 31st December 2019; (iv) Capability profile of the firm (Track Records); including details of the experience in similar assignment (a good track record of working as an auditor will be useful); (v) Technical and Managerial Capability of the firm (Key personnel); (vi) Experience of working in Nigeria; (vii) AII bidders to note that the OAuGF will implement Executive Order 03 (EO-003,2017) (Preference for local Content). (viii) The accounting firm must be properly registered with the office of the Auditor General for the Federation

The short-listing criteria for the Expressions of Interest (EoI) are provided as an annex to the draft ToR for this assignment and can be found at the following website: https://www.health.gov.ng/doc/Terms_of_Reference_for_BHCPF_HUWE_Project.pdf

Consultants may associate with other firms to enhance their qualifications but should indicate clearly whether the association is in the form of a joint venture and/or a sub-consultancy. In the case of a joint venture, all the partners in the joint venture shall be jointly and severally liable for the entire contract, if selected.

A Consultant will be selected in accordance with the CQS method and procedures set out in the World Bank’s, Procurement Regulations for IPF Borrowers (July 2016, revised in November 2017 and August 2018). Also, the attention of interested Consultants is drawn to Section III, paragraphs, 3.14, 3.16, and 3.17 of the World Bank’s “Procurement Regulations for Investment Project Financing (IPF) Borrowers” (July 2016, revised in November 2017 and August 2018). Setting forth the World Bank’s policy on conflict of interest.

Interested firms are to submit three (3) bound copies of Expression-of-Interest (EOI) documents and a soft copy in USB drives, both of which should be submitted in a sealed envelope and addressed to the

Deputy Director, Procurement Office of the Auditor General of the Federation Room 717b, 7 Floor, OAuG F, Audit House Central Business District

Each envelope should be clearly marked with ‘engagement of External Auditor’. Furthermore, the reverse side of each sealed envelope should have the name and address of the bidder and should be submitted not later than 12:00 noon on Tuesday February 25, 2020.

SIGNED AUDITOR GENERAL FOR THE FEDERATION OFFICE OF THE AUDITOR GENERAL FOR THE FEDERATION

Office Of The Auditor General For The Federation – Request For Expression Of Interest For Engagement Of External Auditor To Support The Basic Health Care Provision Fund (BHCPF)

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